Frontline (FRO) AI Stock Analysis

Compare

2,238 Followers

Top Page

Frontline

(NYSE:FRO)

Rating:77Outperform

Price Target:

$22.00

▲(9.45% Upside)

Frontline's financial performance shows strong profitability and cash flow management, although revenue challenges remain. Technical indicators are bullish, supported by a solid valuation with a competitive dividend yield. The earnings call provides a cautiously optimistic outlook with highlights in TCE performance and liquidity, tempered by concerns over adjusted profit and operating costs.

Frontline (FRO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.55B

Dividend Yield6.53%

Average Volume (3M)2.01M

Price to Earnings (P/E)13.2

Beta (1Y)0.46

Revenue Growth0.88%

EPS Growth-45.41%

CountryUS

Employees85

SectorEnergy

Sector Strength56

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)0.15

Shares Outstanding222,622,900

10 Day Avg. Volume1,814,510

30 Day Avg. Volume2,011,893

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.44

Enterprise Value/Revenue3.44

Enterprise Value/Gross Profit9.73

Enterprise Value/Ebitda7.76

Forecast

1Y Price Target

$20.03

Price Target Upside-0.35% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Frontline Business Overview & Revenue Model

Company DescriptionFrontline (FRO) is a leading provider of maritime transportation services, primarily focusing on the transportation of crude oil and refined petroleum products. The company operates a modern fleet of tanker vessels, including Very Large Crude Carriers (VLCCs) and Suezmax tankers, which service global shipping routes. Frontline is committed to maintaining high safety and environmental standards while delivering reliable services to its customers in the energy sector.

How the Company Makes MoneyFrontline generates revenue primarily through the shipping of crude oil and refined products via its fleet of tankers. The company operates under a chartering model, where it leases its vessels to oil and gas companies for specified periods, either on a time-charter or spot-charter basis. Time charters provide a stable, predictable revenue stream as they involve long-term contracts, while spot charters can yield higher rates based on current market conditions. Additionally, Frontline may also engage in contracts with major oil companies and trading houses, which further diversifies its revenue sources. The company's earnings are influenced by factors such as global oil demand, shipping rates, and operational efficiency. Strategic partnerships with key players in the energy sector also contribute to its competitive advantage and financial performance.

Frontline Earnings Call Summary

Earnings Call Date:May 23, 2025

(Q1-2025)

% Change Since: |

Next Earnings Date:Aug 29, 2025

Earnings Call Sentiment Neutral

The earnings call presents a mixed sentiment. While Frontline has demonstrated robust financial metrics, strong TCE rates, and a solid fleet composition, challenges such as decreased adjusted profits, increased operational costs, and global market uncertainties persist.

Q1-2025 Updates

Positive Updates

Strong Time Charter Equivalent (TCE) Rates

Frontline achieved $37,200 per day on the VLCC fleet, $31,200 per day on the Suezmax fleet, and $22,300 per day on the LR2/Aframax fleet in Q1 2025. Booked rates for Q1 2025 were substantially higher, with VLCCs at $56,400 per day, Suezmax at $44,900 per day, and LR2/Aframax at $36,100 per day.

Robust Financial Position

Frontline reported a profit of $33.3 million or $0.15 per share and an adjusted profit of $40.4 million or $0.18 per share. The company has strong liquidity of $805 million in cash and cash equivalents, with no meaningful debt maturities until 2030.

Fleet Composition and Eco Vessels

Frontline’s fleet consists of 41 VLCCs, 22 Suezmax tankers, and 18 LR2 tankers, with an average age of 6.8 years and 99% ECO vessels, 56% of which are scrubber fitted.

Sanctions Impact and Compliance Benefits

Sanctions have increased the demand for compliant vessels as non-compliant vessels, especially in India and China, are shunned. This has positive implications for Frontline's compliant fleet.

Negative Updates

Decrease in Adjusted Profit

Adjusted profit in the first quarter decreased by $4.7 million compared to the previous quarter, primarily due to a decrease in time charter earnings from $249 million to $241 million.

Challenges with Operating Costs

Operating costs per vessel were higher sequentially and year-over-year. This was attributed to higher ship operating expenses and administrative expenses adjustments.

Market Volatility and Global Trade Uncertainty

The tanker market faces uncertainty due to US policy changes, global trade negotiations, and potential impacts from ongoing geopolitical issues like Russia-Ukraine and Iran nuclear deal discussions.

Company Guidance

During the Q1 2025 earnings call for Frontline plc, CEO Lars Barstad and CFO Inger Klemp provided detailed guidance on the company's financial and operational metrics. Frontline achieved time charter equivalent (TCE) rates of $37,200 per day for its VLCC fleet, $31,200 per day for Suezmax, and $22,300 per day for LR2/Aframax in the first quarter. Booking rates for the same fleets in Q1 were higher, with 68% of VLCC days booked at $56,400, 69% of Suezmax days at $44,900, and 66% of LR2/Aframax days at $36,100. The company reported a profit of $33.3 million, or $0.15 per share, and an adjusted profit of $40.4 million, or $0.18 per share. Frontline maintains a strong liquidity position with $805 million in cash and no significant debt maturities until 2030. The fleet, comprising 41 VLCCs, 22 Suezmax, and 18 LR2 tankers, has an average age of 6.8 years, with 99% ECO vessels and 56% scrubber-fitted. The estimated cash breakeven rates for the next 12 months are approximately $29,700 per day for VLCCs, $24,300 for Suezmax, and $23,300 for LR2s, excluding drydock costs.

Frontline Financial Statement Overview

Summary

Frontline demonstrates strong profitability and efficient cash flow management despite a decline in revenue. The company maintains a stable balance sheet with manageable leverage, but the decrease in revenue and return on equity warrants attention. Overall, Frontline is in a solid financial position with opportunities for growth and improved shareholder returns.

Income Statement

Positive

Frontline shows strong profitability with a solid EBIT margin of 32.8% TTM and a reasonable net profit margin of 18.3% TTM. However, revenue has declined by 7.3% in the TTM period compared to the previous year, indicating potential challenges in revenue generation.

Balance Sheet

Positive

The balance sheet reveals a moderate debt-to-equity ratio of 1.58 TTM, indicating leverage is being managed, but still presents some risk. The equity ratio is stable at 37.9%, showing a balanced asset financing structure. However, the return on equity has decreased to 14.9% TTM, suggesting reduced shareholder returns.

Cash Flow

Positive

The cash flow statement is robust, with a significant improvement in free cash flow from negative to $686 million TTM, showing strong cash generation ability. The operating cash flow to net income ratio is healthy at 2.02, indicating efficient cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.90B	2.05B	1.79B	1.43B	749.38M	1.22B
Gross Profit	671.74M	695.91M	761.43M	481.00M	30.61M	536.70M
EBITDA	842.88M	1.15B	1.06B	725.83M	217.24M	628.35M
Net Income	348.05M	495.58M	656.41M	475.54M	-11.15M	412.88M
Balance Sheet
Total Assets	6.14B	6.22B	5.88B	4.78B	4.12B	3.92B
Cash, Cash Equivalents and Short-Term Investments	438.42M	417.56M	315.75M	490.81M	115.51M	177.36M
Total Debt	3.67B	3.75B	3.46B	2.37B	2.37B	2.20B
Total Liabilities	3.81B	3.88B	3.61B	2.51B	2.46B	2.31B
Stockholders Equity	2.33B	2.34B	2.28B	2.27B	1.65B	1.61B
Cash Flow
Free Cash Flow	686.35M	-178.84M	-775.24M	52.93M	-399.47M	-120.26M
Operating Cash Flow	703.00M	736.41M	856.18M	370.89M	62.93M	604.06M
Investing Cash Flow	241.56M	-483.40M	-1.24B	-239.47M	-363.06M	-715.97M
Financing Cash Flow	-805.37M	-147.80M	433.07M	10.03M	223.55M	124.18M

Frontline Technical Analysis

Technical Analysis Sentiment

Positive

Last Price20.10

Price Trends

50DMA

18.70

Positive

100DMA

17.72

Positive

200DMA

16.87

Positive

Market Momentum

MACD

0.44

Negative

RSI

61.40

Neutral

STOCH

78.78

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRO, the sentiment is Positive. The current price of 20.1 is above the 20-day moving average (MA) of 19.38, above the 50-day MA of 18.70, and above the 200-day MA of 16.87, indicating a bullish trend. The MACD of 0.44 indicates Negative momentum. The RSI at 61.40 is Neutral, neither overbought nor oversold. The STOCH value of 78.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRO.

Frontline Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STNG	81 Outperform	$2.50B	3.53	24.68%	3.21%	-7.25%	31.85%
TEN	79 Outperform	$650.45M	4.83	9.22%	6.88%	-3.67%	-8.90%
TNK	79 Outperform	$1.64B	5.91	15.78%	4.15%	-21.71%	-37.58%
FRO	77 Outperform	$4.55B	13.16	14.79%	6.53%	0.88%	-45.41%
INSW	77 Outperform	$2.18B	9.22	12.61%	9.07%	-22.01%	-54.34%
DHT	75 Outperform	$1.83B	9.75	17.90%	6.75%	-8.89%	21.28%
Sector *	65 Neutral	$15.26B	7.31	3.02%	5.32%	4.27%	-62.52%

* Energy Sector Average

Performance Comparison

FRO

Frontline

20.52

-1.16

-5.35%

DHT

DHT Holdings

11.56

1.74

17.72%

STNG

Scorpio Tankers

49.77

-18.14

-26.71%

TNK

Teekay Tankers

48.18

-4.87

-9.18%

TEN

Tsakos Energy Navigation

21.79

-0.72

-3.20%

INSW

International Seaways

44.74

-0.86

-1.89%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 05, 2025